Posted by dohertyjf
I remember when I first went out on my own to build my business. Because I planned to bootstrap the product into existence, I needed to pick up some consulting work to cover my own bills before I felt comfortable taking time to build my product.
I had a sizable group of peers that I contacted to let them know that I was no longer with my last company and was looking to bring on a few new clients. Within a week, I had to stop taking introductions because I was so busy! If you’re a brand-new freelance consultant, this post has some goodies for you.
I have other friends who are purposefully freelance consultants with no current plans to scale beyond it. In fact, they’ve resisted these opportunities because they enjoy what they’re doing so much, and are able to charge a premium for it. This post will help you out.
Some of my friends are at a different stage. They’ve worked for themselves for 3–4 years or longer now and are growing an agency beyond themselves and their own skillset. Along the way, of course, they’re figuring out the challenges of growing headcount and types/sizes of clients while they themselves learn to level up as a CEO, as a manager, and as a sales executive, since agency founders are often the salespeople for the first few years of their company’s existence. The client acquisition strategies change. This post is also for you.
And finally, agencies often decide that they are ready to expand beyond their main core offering and offer tangential services that they are either being asked for actively or where they perceive an opportunity exists. Since they already have a functional and maybe even (wildly) profitable services business, how can they justify taking time away from that to build out a new service offering? The mindset and strategies change once again. We’ll get into some of those.
Building a service-based business is hard
Over the last two years, I’ve worked with over 150 agencies and have seen over 800 businesses (it’s probably closer to 1,000 at this point) looking to hire an agency or consultant. I’ve also worked in-house, as a solo consultant, and for a quickly growing boutique digital agency.
After the experiences I’ve had seeing everyone — from new scared-out-of-their-wits solo consultants all the way to long-established agencies looking to grow their practice — I decided to take a step back and reflect on the strategies I’ve seen both work and not work for consulting entities at different stages of growth.
That’s what we’ll cover today. If you’re a new consultant, an agency looking to level up the size of your accounts, or an agency looking to move into new service offerings, you’ll find something in this post for you.
Along the way, you’ll hear from consultants and agency owners at different stages of their business and what they did to get to where they are currently. After all, war stories are way more fun than “here are x steps you can follow to also be amazing” anecdotes.
Tell me if you’ve seen this happen before: a friend is tired of their job, gets laid off, or otherwise finds themselves unemployed. They decide that they’re going to give freelance consulting a go.
Three months later, they’ve taken a new job at a new agency and are repeating the cycle they went through before.
Sound familiar? If you’re in the digital marketing consulting world, you likely know at least a few, if not closer to a dozen people where this has held true.
I’m not going to say that everyone goes back to traditional employment because they’re having a difficult time getting new clients, but this is far and away the largest reason I see. They get a few months in, they have too few clients paying them too little, and so they panic and go take a job doing what is comfortable. They’ll repeat the cycle in a few years again.
I get it. The beginning of working for yourself can be terrifying. I’ve been there. Saw a therapist, got the t-shirt, am I right?
What if I told you that you could avoid this if you really want to? That you could use some proven techniques to get new clients that pay you what you’re worth?
Overcoming common “new consultant” fears with strategic thinking
You’ll hear entrepreneurs who have built and sold their companies (sometimes multiple times) tell you to take a “burn the ships” approach, where you set off and don’t give yourself a time limit or an out if you can’t make it work.
The problem with this is that it’s a fallacy brought about by survivorship bias — defined as “the logical error of concentrating on the people or things that made it past some selection process and overlooking those that did not, typically because of their lack of visibility.” Often these entrepreneurs look back and talk about how they could have done it, or how they did it for their second or third business once they’d already made quite a bit of money.
Quite simply, if you want to set yourself up for success, you should already have replaced (or have a clear path to replacing) your income from your day job before you even go out on your own.
You can do this by picking up freelance work on the side from your day job. Get one or two clients that pay you every month and learn how to manage those. Learn what it takes to retain these clients and even grow the accounts.
Next, figure out the minimum amount of money you need to make every month while only working the number of hours you want to work before you take the leap. If you have two clients, you can probably get two more pretty easily. If you spend 10 hours a week on these two clients and only want to bill 30 hours per week (which is actually quite a lot), then you know you can bring on four more clients at the same level (and fewer clients if they pay you more) and have the lifestyle and income you want.
It’s simple math.
The “new consultant” sales mindset
Clients come to solo consultants instead of agencies for a very specific reason. They want direct access to your specific brain and to be able to speak with the person actually doing the work. In fact, I’ve seen many companies come through Credo who need multiple services (not just strategy) across organic and paid, but they don’t want an account manager setup like they’ve had before with an agency.
This, plus your experience, is your competitive moat. During the initial discovery call with every potential client, don’t forget that you’re interviewing them as much as they’re interviewing you. You need to learn:
- What they are specifically looking to accomplish through retaining someone’s services;
- What their expectations are for how quickly they will see this;
- If they have resources to get done what you recommend, or if you have time to implement what they need;
- Whether they’re willing to pay you what you are worth.
Assuming all of these check out, then in my opinion, you’re good to move forward with the proposal process.
A quick word on pricing
If you’ve never worked for an agency before, you should ask agency friends or other freelance friends what they charge per hour, then use that as a benchmark. If you want to raise your rates, then do it slowly with new clients until you hit a ceiling. Now you know your price ceiling for the current services (whether strategy, implementation, or both) you offer.
New client acquisition channels
Now that we have the common fears identified and you’re armed with a better sales mindset, let’s explore the strategies you should leverage first to build your consulting practice to a base where it sustains your lifestyle and you’re able to remove the stress of starting from the equation and eventually think about growth.
The strategies I always counsel brand new solo consultants to use are:
- Referrals – Ask your circle of professional peers if they know anyone looking for what you have to offer;
- Referrals – Ask your friends and family if they know anyone that might need what you’re offering;
- Agency white label – Approach agencies in your area to see if they need help on a contract basis with their clients;
- Teaching – This is a longer-term play, but a great way to get clients in the long run is to teach others how to do what you do. I’ve seen it hold true that if you teach people how to do what you do, they’ll want to hire you to do it for them.
These are the easiest and most direct ways to get introductions to potential clients who are highly likely to close into clients.
Long-term this does not scale, but it can get you to the point of covering your expenses, allowing you to breathe a little bit and invest for the future. And if you’re smart about it and haven’t signed yourself up for 60+ hours per week of billed work, you can have a great life balance.
To give some real-world examples, I reached out to two of my friends who became solo consultants in 2013/2014.
First is Tom Critchlow, who went solo in late 2014 after two years at Google New York. When asked how he got his first consulting clients, Tom said that his first leads came from direct referrals from a friend:
“Since that first lead I’ve gotten about 80% of my clients through referrals from my direct network,” he shared. “I’d definitely emphasize the importance of a strong network and ensuring that you’re communicating with your network often to keep them up-to-date with what work you’re doing.”
Next I chatted with Michael King, who has since built his agency iPullRank into an industry powerhouse, and asked him how he got his first clients when he left the NYC agencies he worked for. To get his first, he shared that thought leadership played a huge role:
“My first two clients came through two different methods of thought leadership. One came via a post I’d written for Moz about content strategy, and the other came from a panel I spoke on. Overnight, I went from 0 to 10.5K MRR.”
Solo consultants happy staying solo
If this is you, then congratulations. In my mind, you’re finding nirvana in a lot of ways.
Solo consultants with more years of direct consulting experience are able to charge good hourly rates and monthly minimums from clients, according to my data.
Once a consultant has survived the initial push to get new clients, the journey is far from over. In fact, many solo consultants have come up against this and gone through droughts where they were between projects.
This brings up the question: How can solo consultants, who can only realistically bring on a limited number of clients before they become too numerous, keep a strong potential client pipeline?
Define your niche and build processes
The answer is usually to tightly define your niche and then, depending on your niche, to build processes to deliver high quality work.
High-touch strategic consulting does not scale. It also does not have to scale if you charge a high hourly rate ($300/hr for strategic consulting that drives large revenue increases is not crazy, and may even be too low), in which case you can work with just a few clients and still create a great income for yourself.
When you’ve defined your niche, whether affiliate marketing driven by content or local SEO for realtors, then you put together the strategy to reach them.
This should go without saying, but if you’re asking how to define your niche, then you aren’t ready to be a highly paid solo consultant yet. Hone your craft and discover who you love to do work for, then go serve those customers on your own.
Once your niche is defined, you can focus on that group.
Targeting your ideal audience
As mentioned above, the toughest part of being and staying a solo consultant is managing your workload and saying “no” or “not yet” to potential clients, while at the same time protecting your downside should a client decide to stop your services for any reason, whether your fault or because of internal actions.
The best solo consultants that I know, who also have a strong pipeline of potential clients, have built this through:
- Content. They produce content related to their target market’s problems and thus become a thought leader in that niche. This will often lead to recurring columns in industry publications.
- A strong referral network. They know the who’s who of their niche and are their go-to when someone needs the consultant’s specific skillset.
- Speaking. Getting a one-off or set of speaking engagements in front of your target audience often directly drives potential clients and cements you as an expert in their minds.
The goal is to build your own name as an expert so that you consistently have potential customers approaching you to see if you can work with them, while also knowing your limits and when you may next have available time.
The goal isn’t to magically be able to get new inquiries when you need them (though this may happen if you’ve built this system), but to be able to go back to a group of people who have already inquired about your services and tell them that you have some availability. A pro move is also to ask if they know anyone who may need your services, as well.
Not every consultant desires working with large clients who each pay the equivalent of a full-time salary. Some consultants prefer working with smaller clients, mostly small or local businesses, because of the unique challenges that these clients face.
In this case, the challenge is to work out how you scale quantity without sacrificing quality or client retention. There are many ways to do this:
- Find an agency or group of consultants you trust that you can outsource certain parts of the project to;
- Leverage technologies like HubSpot, Moz, or others that allow you to automate a lot of the work;
- Use tools like HubSpot, Calendly, UberConference, or others to help scale scheduling and admin parts of the business;
- Use virtual assistants, bookkeeping services like Bench, and payroll services like Gusto to alleviate a lot of the business operations so you have more time to work for clients.
As Francois Marcil of Ehook.co shared:
“When you have over 10 clients, the time spent attending meetings is the biggest obstacle to serving all your clients well. For this reason, I reserve 2 days of the week for meetings and 3 days for work. The rule is strict, and I inform my clients from the start.”
When a solo consultant sets up these processes, it not only makes their life a lot easier and their clients happier (which leads to better retention, which leads to a healthier business), but it also sets them up for success should they decide later that they want to start an agency. In this case, their processes of both acquiring and managing new clients will let them generate the cash flow needed to make the leap to employing someone full time.
Agencies leveling up
Some business owners don’t feel the need to constantly push and grow their business. They’re bootstrapped, their business affords them and their employees a great lifestyle, and they have no desire to take on more responsibility with their business. If this is you, then I’m a bit envious and encourage you to enjoy it.
If you’re anything like me, though, you’re never happy with maintaining. You always want to be growing, to be learning, to push yourself and your business to see what it’s capable of. If you’re on this course, then keep reading.
Your strategies have to change a bit when you go from being a solo consultant to growing your agency. A lot of your processes are going to break or need tweaking as you grow the number of people working on accounts. Your challenge now becomes managing the growth of your headcount while maintaining quality and bringing in great new clients at the same time.
This is likely way too much for one person to handle, so at some point you’ll be forced to decide what you are great at (and love doing) that is also instrumental to the business’s success. Then hire out for the rest.
Let’s focus on the sales part, of course.
At the beginning of your journey as a brand-new consultant, you were likely heavily dependent on one-off referrals from family and friends. But referrals don’t really scale.
As you’re looking to grow your business quickly, your channels have likely shifted to:
- Speaking. If you have a dynamic founder who is a keynote-level (or heading in that direction) speaker, this can be great lead generation;
- Strategic partnerships with investors or other agencies;
- Your own search traffic and thought leadership on your own website;
- Your own advertising of your services online.
You’re facing the unique challenge of increasing the quantity of potential clients contacting you while not sacrificing quality. While difficult, this is absolutely possible. You can grow your revenue by:
- Targeting new clients who have similar traits to your existing ideal clients;
- Growing accounts by upselling your existing clients to other services you offer that they need;
- Defining a specific niche or type of company where you get outsized returns, and then target them specifically through content, speaking, education, or both.
Sales changes as you grow. You’re looking for long-term sustainable clients as it is four to ten times cheaper to retain and grow your current clients than to get new clients (source). If you’re investing in landing new clients, you should not also have to worry about retaining your current clients. If you are, then you are simply refilling a leaky bucket and you will not grow.
Michael King of iPullRank is no stranger to the challenges that agency founders face as they grow, but he’s successfully transitioned from solo consultant to now managing seven figures in agency income. So what does he do differently?
“The difference is really that it’s far more dire,” he shared. “The maintenance of payroll becomes the battery in your back to have to just figure it out. Whereas when you’re by yourself and you have a low month or you lose a client, it’s not that big of a deal.”
Johnathan Dane of KlientBoost credits lessons he’s learned about sales along the way in growing KlientBoost from himself to $4M in revenue in just a few years:
“We’ve been very fortunate to have 99% of our sales come from our content, and when that happens, our sales cycle is drastically reduced because the potential client already likes us and has found value from what we’ve given them,” he said. “So even 2.5 years in, I still handle the inbound sales — which I know isn’t scalable — but you gotta allow yourself to still have some fun.”
I should also note that at this point, you should have someone dedicated to sales and onboarding new clients full-time. This can be filled by the founder if the founder is stellar at sales, but most often I see this role being given to a dedicated sales executive who hopefully also has marketing experience, or has proven their aptitude for learning and applying it so they sell the right work.
Agencies moving into new service offerings
At some point, you may max out your growth in your current niche and with your current offerings. At the same time, you want to continue growing but don’t have the option of increasing client budgets. Or, maybe a new platform emerges (think: Snapchat) that has the opportunity to be big and you want to be an early mover in helping your clients get exposure.
But moving into new niches is hard when you’ve established yourself in another service offering and that’s how you’re known. Every agency has a primary service offering, so how do you move into new niches?
There are two main ways:
- Think of this new service offering as a startup in and of itself. It is responsible for its own profit and loss (P&L), as well as landing its own new clients;
- Upsell your current clients into this new offering as well.
This is hard. Brandon Doyle of Wallaroo Media, who went from being a generic SEO agency to leading the way in travel marketing and Snapchat from their offices in Provo, Utah, knows this firsthand:
“With a background in SEO, we strongly believed in its ability as a channel,” he shared. “We utilized SEO and evergreen content to carve out a name for ourselves both in the travel space, and more recently as a leader in Snapchat-related content, strategies, and news. The latter paid off, as we were just recently named an official Snapchat Agency Partner!”
Will Critchlow, CEO of digital marketing agency Distilled (full disclosure: I used to work for Distilled), also knows a thing or two about moving into an adjacent vertical. The agency recently become recognized for not only SEO, but creative content and outreach services, too:
“All our moves have come from the passion of the team,” shared Will. “Team members saw an opportunity, started doing part of the solution, and pitched the rest.”
Finally, your marketing will change as you seek traction in this new vertical. The topics you write about, the people you reference, the outreach you do, and the places you choose to interact will necessarily change.
This is specifically why I recommend tasking someone specifically with building out this new area. At Wallaroo, this was Brandon. At Distilled, this was Mark Johnstone who was previously an SEO consultant who had an interest in big creative content and Tom Anthony with an interest in technical A/B testing for SEO.
Consistently generating new potential projects at every cycle of your business’s growth is the best skill you can learn as a services business owner.
Leave a comment about the channels you’ve found to be the most effective!
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Reblogged 1 year ago from moz.com